New Trade for August 31st 2020

Chipmaker, Skyworks Solutions (SWKS) products will play a critical role in helping 5G smartphones connect to the network.  

Big opportunities lay ahead for SWKS.  Two of Skyworks’ biggest customers are Apple and Chinese smartphone maker, Huawei.  China will account for most 5G smartphone sales in 2020.  5G phones make up nearly half of new smartphones coming to market, with most in China, according to a Susquehanna report.  Samsung, Huawei and others lead in 5G smartphones shipped.

Apple is expected to roll out new 5G iPhones in the fourth quarter, this could be a key event for 5g stocks.  While many analysts expect 5G iPhones to spark a new upgrade cycle in 2021, Apple’s pricing could be a key factor.

Skyworks CEO Liam Griffin estimates that the company’s revenue opportunity in a 5G handset could be double or triple that of 4G devices.  He said in the latest earning call, “So you could be looking at platforms that in a 4G world maybe offered $4to $5 for us;  in a 5G world it could be $8 to $10, or even $15.”

Skyworks peer Qorvo estimates that 250 million smartphones could be shipped in 2020.  That number could go up to 1.5 billion annually by 2025, according to third-party forecasts.  Skyworks Solutions’ mobile business accounts for 69% of its total revenue and could drive revenue growth in the years to come.